Buying a Franchise in the UAE: Securing the Right to Relocate Your Outlet

When buying a franchise in the UAE, you may assess the brand and location carefully, but what happens if you need to move after opening? Your success as a franchisee depends not only on whether the site works today, but also on having a clear contractual route to change it later. The right to operate an outlet does not necessarily include the right to relocate it, even within the same neighbourhood. The relocation clause therefore deserves a separate review before you pay fees and commit to fitting out the premises.

Are you buying operating rights or rights tied to a specific address?

Start with the agreement’s definition of the ‘approved site’. Is its address stated in the contract, a schedule or a separate approval letter? Is the licence limited to operating at that address? Also review the definition of the outlet: permission to operate one restaurant at a fixed site is different from operating rights that allow relocation within an agreed geographical area.

The model restaurant franchise agreement published under the Ministry of Economy and Tourism’s standard contracts initiative illustrates why this detail matters. It permits the opening and operation of one outlet at a fixed site, and links the parties’ obligations to securing ownership or leasehold rights at the approved site and completing the fit-out to the franchisor’s requirements. This is a contractual model, not a legal rule tying every franchise to its site in the same way.

Ask the franchisor to answer three questions in writing: Is relocation permitted? Does it require a contract amendment or a new agreement? Will the original franchise term, fees and rights remain unchanged? Do not treat verbal approval from a development manager as a substitute for a binding provision issued by an authorised party.

Understand the legal framework before seeking protection

The UAE has no comprehensive federal franchise-specific law requiring a standard pre-contract disclosure document or giving franchisees an automatic right to relocate an outlet. The relationship is governed by general contract and civil transactions rules, and by Federal Decree-Law No. 50 of 2022 Issuing the Commercial Transactions Law, depending on the nature of the relationship and the issue involved.

Trade mark legislation and local licensing requirements also apply. Federal Law No. 3 of 2022 Regulating Commercial Agencies may apply if the relationship meets its legal conditions; do not assume that every franchise agreement is a registered commercial agency. Obtain advice on the legal classification of the relationship before relying on protection your arrangement may not actually provide.

In practice, the franchisor’s approval to relocate does not replace approvals from the authorities responsible for the new site. Equally, obtaining a licence for the premises does not automatically change the contractual limits on your right to use the brand. Build two separate workstreams into your relocation plan: obtaining the franchisor’s approval and checking whether the business can operate at the alternative address. Neither guarantees the other.

Turn approval into a defined, enforceable process

The phrase ‘relocation is permitted with the franchisor’s approval’ leaves many questions unanswered. Negotiate an addendum setting out when you may apply, what information is required and how the request will be assessed. Distinguish between a voluntary move to improve sales and a move forced by circumstances at the site, such as being unable to remain there or redevelopment of the building.

The addendum should cover the following:

• Alternative site criteria: Floor area, frontage, access, building services and the area’s suitability for the brand concept.
• Application documents: Plans, estimated fit-out costs, a timetable and the commercial information the franchisor needs to make a decision.
• Response deadline: An agreed period starting when the application is complete, with any missing information identified in writing rather than leaving the request open-ended.
• Reasons for refusal: Require objective, written reasons and an opportunity to revise the proposal or submit another site.
• Effect of approval: Record the new address, the date operations will begin there and what happens to the licence relating to the old site.

These are suggested safeguards to negotiate, not automatic rights granted by franchise-specific legislation. Do not assume that silence from the franchisor means approval. If you want to address delayed responses, have a lawyer draft a clear escalation and resolution process that does not permit unauthorised operation. Ask existing franchisees about actual relocation experiences, then compare these with the written procedure rather than general assurances.

Calculate relocation costs and the remaining contract term

Request a separate breakdown of every charge that may arise from the move: site assessments, approval visits, design reviews, retraining and reopening. Check whether a new franchise fee will be payable, and do not assume that your initial fee includes approval of another address.

Then prepare a budget covering the dismantling of reusable fixtures and equipment, transport and installation, the new fit-out, handing back the previous premises and any period when you will have obligations at both sites. Factor in lost sales during downtime, and agree contractually how ongoing fees will be treated during the transition rather than assuming they will stop automatically.

Most importantly, compare the new investment with the remaining franchise term. Relocation may be technically feasible but commercially unviable if the agreement expires before you recover the cost. Negotiate an extension, if needed, before committing to the alternative site, and establish whether it requires a new agreement or different financial terms. If you rely on finance, do not treat the franchisor’s approval as the lender’s consent to a change of location or use of funds.

Practical takeaway: Before buying, request a clause that sets out your right to apply for relocation, the approval criteria and timescale, the costs and the effect on the franchise term. Do not commit to an alternative site until these points are documented and you have checked the approvals it requires.